MetaChat - Lease Purchase? Preforeclosure?

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19 February 2009

Lease Purchase? Preforeclosure? The bf and I are looking to move in the near future. We are wanting to rent a house(NOT an apartment, we both agree on that). Looking through Craigslist I keep seeing ads that refer to lease purchasing etc. So basically, it sounds like a "rent to own" plan for a house going into foreclosure? Does anyone know anything about these deals? Are they good? Bad? Bogus? How can you tell? →[More:]

Just curious, I have never owned a home so I know next to nothing about how it all works.

Here are some examples.

post by: evilcupcakes at: 02:06 | 6 comments

D'OH! Why why why I can't I ever remember the "more" tag!!! *bangs head on keyboard*

posted by evilcupcakes 19 February | 02:08

ow! ow! Don't hurt your poor head! I fixeded it. :)

posted by taz 19 February | 02:17

1 word: lawyer.

posted by Ardiril 19 February | 02:32

Thanks taz! Head's all better!

Ardiril: as in I need one or the seller is one?

posted by evilcupcakes 19 February | 02:45

You will need one. Also. you could probably get some cheap advice if you take a realtor out for lunch. In this climate, I would look for a deal where the seller sets up an escrow account of a few thousand dollars that goes to you if he goes into foreclosure during the first year in addition to all the money you pay towards the down payment. Or, something similar. The realtor and the lawyer may have better ideas along those lines.

posted by Ardiril 19 February | 03:11

When I took my homeownership class, they warned very strongly about these kinds of deals. However, that was before the economy collapsed and maybe they have changed their minds. You ARE going to need a lawyer, though, I second that, because you will need an airtight contract. Basically what you are doing is assuming the owner's mortgage - here's the rub - without the mortgage holder's knowledge. So if the person who is on that mortgage decides not to send your "rent" check to their mortgage holder and the bank forecloses, you are out on your ass with maybe 10 days notice. Yes, no lie, if they foreclose the sheriff can kick you out with little or no notice and you have no rights whatsoever.

What I did during my whole long haul before I bought this house, while it went back and forth in foreclosure, was have a real estate lawyer draw up an airtight sort of lease/contract that ensured that my "rent" money went into an escrow account at the lawyer's office. If you do something like that, you should be fine. If you just rent from the guy hoping he won't let the bank foreclose, watch out.

posted by mygothlaundry 19 February | 09:51

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